Documents & Reports

Romania has not suffered the productivity slowdown and decline that affected most of EU15. In the aftermath of the Global Financial Crisis the country experienced growth in labor productivity, which however hasn't been as strong as that of other EU12 ... See More +Romania has not suffered the productivity slowdown and decline that affected most of EU15. In the aftermath of the Global Financial Crisis the country experienced growth in labor productivity, which however hasn't been as strong as that of other EU12 countries. Latvia, Lithuania, and Poland showed a much stronger performance. On a path to catch up with Romania's productivity level, Bulgaria experienced an almost 50 percent higher growth rate in labor productivity. Even though the country's labor productivity is still well below the regional average, Romania has been on a path of convergence toward US labor productivity levels since the mid-2000s. The process has progressed at a slow and uneven pace, with labor productivity now being 40 percent of that in the US. Conversely, Romania has moved at higher pace toward convergence in terms of capital intensity. Despite the recent reversal, the Romanian ratio of capital to labor is at about 60 percent of that observed in the US. The overall the gap in TFP levels with the US has shrunk over the period considered, where temporary setbacks have been more than counterbalanced by subsequent improvements.
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